PCB business tax shows growth

By Valerie Garman / The News Herald

Published: Sunday, October 13, 2013 at 04:45 PM.

“The economy of Panama City Beach is very much tied to the tourism industry,” Rowe said. “Visitor spending in Panama City Beach is over a billion dollar industry. That is visitors taking their hard-earned income and leaving it in our local community.”

As White noted, rises and falls in bed tax are consistent with fluctuations in the city’s business tax, with 2011 and 2012 showing the greatest growth. Likewise, between 2008 and 2010 neither fund showed substantial growth.

Rowe said bed tax collections for 2013 are slated to exceed $15 million, equal to about $300 million in total lodging revenue. On average, about $822,000 is spent on hotels and condos in Panama City Beach daily, he said.

Bed tax collections for September 2013 have yet to be calculated, but Rowe said if even they remain flat, the agency will have shown a 50 percent increase in lodging revenue since 2007.

For the city government, however, a rise in revenues is coupled with an increase in expenditures. Roughly half of the city’s general fund budget goes to fund public safety through the police and fire departments. The police department’s budget alone usually hovers around $6.5 million, White said, with the fire department clocking in at about $3 million. For the 2014 fiscal year, the city budgeted $7.7 million for business tax receipts, which White said represents a conservative growth estimate.

“It’s very difficult, because you can’t predict things like the weather,” she said. “Typically, we look at historical collections and they’ve increased pretty much every year.”

Much like bed tax, White said the city’s business tax revenue is one of the most difficult budget items to estimate because collections vary.

PANAMA CITY BEACH — Despite a lagging economy, revenues from Panama City Beach’s 1 percent local business tax have risen by more than $2 million, or 40 percent, since 2006.

Panama City Beach is one of only a handful of Florida municipalities that collect a business tax, and even more rarely, they city does not levy a property tax.

“It’s the single biggest source of revenue in the general fund,” said City Clerk Holly White. “It’s very important to us because it is the biggest line item source in that budget.”

During the 2013 fiscal year, the city’s business tax receipts topped $7.6 million, up from about $7.5 million last year and $5.4 million in 2006.

“I think it’s pretty unusual that we’ve been so fortunate with the business tax even though the economy has struggled over the years,” White said. “There’s no doubt that the gross receipts have grown significantly.”
Although the business tax is not considered a sales tax, it functions as one. White said the collections often correlate with the Bay County Tourist Development Council’s bed tax collections, a revenue source that measures visitation based on a tax levied on overnight hotel and vacation rental stays.

“It doesn’t always track with the TDC’s bed tax, but usually when the TDC’s bed tax is up, our revenues are usually up,” said White, also noting significant increases in the beach’s retail market over the years.

TDC Director Dan Rowe said consistent increases in both the city’s business tax and bed tax prove that tourism is big business in Panama City Beach.

“The economy of Panama City Beach is very much tied to the tourism industry,” Rowe said. “Visitor spending in Panama City Beach is over a billion dollar industry. That is visitors taking their hard-earned income and leaving it in our local community.”

As White noted, rises and falls in bed tax are consistent with fluctuations in the city’s business tax, with 2011 and 2012 showing the greatest growth. Likewise, between 2008 and 2010 neither fund showed substantial growth.

Rowe said bed tax collections for 2013 are slated to exceed $15 million, equal to about $300 million in total lodging revenue. On average, about $822,000 is spent on hotels and condos in Panama City Beach daily, he said.

Bed tax collections for September 2013 have yet to be calculated, but Rowe said if even they remain flat, the agency will have shown a 50 percent increase in lodging revenue since 2007.

For the city government, however, a rise in revenues is coupled with an increase in expenditures.
Roughly half of the city’s general fund budget goes to fund public safety through the police and fire departments. The police department’s budget alone usually hovers around $6.5 million, White said, with the fire department clocking in at about $3 million.
For the 2014 fiscal year, the city budgeted $7.7 million for business tax receipts, which White said represents a conservative growth estimate.

“It’s very difficult, because you can’t predict things like the weather,” she said. “Typically, we look at historical collections and they’ve increased pretty much every year.”

Much like bed tax, White said the city’s business tax revenue is one of the most difficult budget items to estimate because collections vary.

Without revenues from the business tax, it would be impossible for the city to operate.

“If we didn’t have this source of revenue we’d have to find something else,” White said. “I don’t see how we can run without it.”